“Kept growing the core business”

When Bengaluru-based verse Innovation., the parent firm of news aggregator dailyhunt and short-video app Josh, raised its first $200 million in March, its offer was oversubscribed three times. As dailyhunt showed upbeat revenue growth and Josh picked up momentum, VerSe, founded by Umang Bedi and Virendra Gupta, made it as one of India’s tech unicorns. Dailyhunt currently has 300-million plus monthly active users (MAUs). Josh, a seeming twist on Tik Tok’s dynamic that has made the creator platform and economy accessible to vernacular language users, has 115-million plus MAUs — the made in India and made for India product for local, non-English audiences is competing with the duopoly of Google and Facebook, which has dominated the digital technology market so far. Another new platform is set to be added soon to the VerSe family with an AI-ML engine to communicate with audiences across 14 languages.

The Idea!

Umang Bedi (U.B.): Back in 2015, the day “the meeting of minds’ happened was the day the idea was born. Virendra (Gupta) had then founded dailyhunt, with an AI ML-led model for vernacular audiences. We were eager to reenergise the pivoting market and the Internet that was booming in terms of users. In 2017, we decided to build dailyhunt as a vernacular language content discovery platform to serve Bharat. Our mission was to set up a technology company in India that could compete with the duopoly, and still generate business revenues.

Early Struggle

Virendra Gupta (V.G.): VerSe was launched when Google and Facebook already had an establishment in India. The competition came from the two giants and also from other global tech companies that had better AI and ML and promised stronger deliverables. To say the least, resilience is what has brought us this far in our journey.

Make Or Break Moment

V.G.: There has been no single moment. From the start till today, the journey of building and pivoting the digital platforms has been smattered with challenges — in terms of content, formats, stakeholders and competitors, as the industry’s growth lies in disruption of old models and creation of new ones.

The Business Model

U.B.: The entire model is based on the idea that Internet is for the local language audience of Bharat. VerSe works on three flywheels. The first is the content creator. As more and more content is created and we identify popularity and engagement for the same, we pay them a percentage from the advertising revenue. As personalisation gets better, users grow, and more advertisers come in. The second is a self-serve platform for small businesses and the last is the advertising network, selected through bidding.

Tech Challenge

U.B.: The first step was to transform dailyhunt from a news aggregation platform to a local language content discovery platform for Bharat. We went ahead and increased the number of partners to 100,000, streamlined the content genres so that only 30% is news. We introduced different formats such as video and hyper-local cards, and developed the AI to serve across 14 languages, in order to understand the preferences and patterns of consumption. Our key effort lay in building on the basic DH 1.0, monetising it with ads so that we had an end-to-end adtech platform of our own.

When we built our initial MVP [minimum variable product], the first version was not in line with the large scale and the growth that we had envisioned. In no time, tech leaders at VerSe re-architected the systems. It was a fun and challenging period for people with ample learnings to take home.

V.G.: As we grew the team from a few members to hundreds, we made sure we strictly follow a data- and experiment-driven culture, from top to bottom, since data is key for us. We made use of insights and refuted or proved hypotheses based on experiments rather than intuition. We also developed a deep culture for automation.

HR Challenge

V.G.: CEOs tend to think they have the answers for all the questions. The truth is we don’t. We just have to look at the data and ask the right questions. It is important to hire the best and empower them. The best wisdom comes from them. Also, functional skills lie in being flexible and in evolving with the market. We focus on people who show the micro-entrepreneurial streak, and identify solutions rather than trying to force-fit them to the issue.

Managing Investors

U.B.: We never ran a process. Our strength lies in technology, content and personalisation. In early 2020, Rupert Murdoch made a large investment in VerSe Innovation. At that time, dailyhunt was showing positive revenue growth. In under a year since its launch, Josh had 100-million MAUs and 50-million DAUs. When our demand got rich, the valuation got richer. Never pitch to investors because it means you’re trying to sell. Just keep your focus on the core business — keep growing the core elements such as users, engagement, retention, technology and monetisation. Let the metrics and outcomes speak louder. Recognition and valuation will follow.

Marketing & Sales Lessons

U.B.: In addition to the traditional ways of advertising through the duopoly, our non-linear ways include partnerships with telcos, handset manufacturers and publishers. Our actual reach has been through organic discovery of content. The beauty of our content lies in it being shareable — through Whatsapp or any other social media network. We have also done a bit of targeted advertising in Tier-II and III cities. We organised a massive road show that culminated in a talent hunt with over 140,000 people participating and creating videos. We are now taking the concept to 100 more cities in India, driving awareness, to get more creators and diversity.

When Did You Think You Had Arrived?

U.B.:Never; the paranoia is there every day.

Riding Through Toughest Times

U.B.: When we came together, it was on the back of a large term sheet we had worked on. Two weeks in, it didn’t go through. Our IPs are people; we do not have shop floors or storefronts to correspond with them. Not able to pay our employees on time is an inevitable fear every entrepreneur has to confront. Retrenchment is a bigger nightmare. We have put together whatever capital we could to keep the trajectory going.

What Next?

U.B.: The market is constantly evolving thanks to newer forays and innovations. Virtual, augmented reality and more exciting things are yet to come. We aspire to build a multi-billion dollar revenue business and have set a solid foundation. All of VerSe Innovation’s content partners are paid and licensed. On the brighter side, vernacular audiences are driving the market. We have identified the investment areas. The 10 petabyte AI dataset stack is exploding and expanding, and VerSe is hiring teams. More ways of monetisation for our creators, more ways of live-streaming, content around e-commerce experiences are on the cards. We want to invest more in the creator ecosystem and acquisitions that will turn out as core assets.